Nigeria: What Nigerians Expect From Insurance Operators in 2023

25 January 2023

As insurance operators double efforts to realise their insurance penetration dreams, Ebere Nwoji reports that members of the insuring public expect much from the operators this year.

The Nigerian insurance industry no doubt has joined other business communities around the world to welcome the 2023 new business year with higher hopes, lots of business proposals, expectations for higher turnover, profitability and better returns on investments.

On their part, the insuring public from whom these streams of premium is expected to flow for the realisation of these positive dreams, equally expects nothing short of quality and satisfactory services marked by quick claims processes and payment from the insurers.

Indeed, members of the insuring public, going by their behaviours and countenance last year seem not ready to accept anything any insurance firm decides to offer in terms of service delivery that is short of their expectations this year.

This means that all arms of the industry should be ready to contribute their quota towards ensuring maximum satisfaction and pleasing of this big -boss -customer who can send the smallest and biggest insurance firm and even the regulator out of business.

This being the case, many insurance firms and various arms of the industry should be on their toes to start the year on a very good note.

Mutual Benefit Assurance, few days back set the pace by holding the 27th edition of its annual thanksgiving and staff award during which it expressed gratitude to God for its 27years of successful insurance operations in Nigeria and thanked it customers for support over the years while pledging its determination to focus on customer satisfaction this year.

The Chartered Insurance Institute of Nigeria is set for its annual insurance breakfast and brainstorming session during which it prepares operators' mind on the way to go in the new business year.

As the new year progresses, industry watchers and members of the insuring public are waiting to see what shape the industry will take this year while both the regulator and various arms of the industry are busy brainstorming on how to break new grounds in their efforts to move the industry to higher level.

Among the arms of the industry that are expected to contribute towards reshaping and repositioning the industry are the National Insurance Commission (NAICOM) which has already on the first day of this year took a step similar to what it did ten years ago in the industry in implementing the "no premium no cover aspect of insurance Act 2003 by increasing the compulsory motor insurance rate on January 1, 2023.

The commission on January 1 this year reviewed upwards by no less than 200 percent the premium and claims payable on motor insurance policy in Nigeria.

The premium rates paid on motor insurances in the country, especially the Motor Third Party Insurance has lasted for over twenty years despite the inflation rate.

The result is that as inflation rates heightened, culminating in high cost of repairing damaged vehicles without corresponding increase in premium paid, many insurance firms resorted to shirking claims from the policy, taking advantage of ignorance of the insuring public on the claims payable on the policy.

But NAICOM on the first day of 2023 shaded its regulatory light on the policy by reviewing both the premium rate and claims figure payable upwards.

As it is now, members of the insuring public are not comfortable with the increase with the result that many are now indifferent to renewing their motor insurances with genuine insurance underwriters.

Many will prefer to renew their insurances with fake insurance certificate sellers who will be ready to collect paltry sum and issue them with fake certificates. On the part of the insurers, underwriters are lamenting that they are losing their customers due to the increase in the premium rate and as such some are selling the policy especially the Motor Third Party insurance below NAICOM's official rate.

NAICOM has got the big work of ensuring the enforcement of the new rate as well as liaising with the Nigeria Insurers Association to block every loophole through which the industry will suffer premium leakages in the sale of motor insurance policy.

It is also expected that the commission will this year focus much more attention on implementation and enforcement of other five compulsory insurances in Nigeria as well as consolidate on its insurance awareness creation efforts.

The objective of setting up the Commission is to ensure effective administration, supervision, regulation and control of insurance business in Nigeria.

The commission has the duty to establish standards for the conduct of insurance business this year in order to improve on the existing standard and ensure that operators conduct their business better than they did last year.

The commission is to determine whether there is need to increase other insurance rates this year and should as such, approve rates of insurance premiums to be paid in respect of all classes of insurance business.

It also has the duty to approve rates of commissions to be paid in respect of all classes of insurance business, ensures adequate protection of strategic government assets and other properties, regulate transactions between insurers and reinsurers in Nigeria and those outside Nigeria, act as adviser to the federal government on all insurance related matters; especially in the face of prevailing poor attitude of government towards insurance of its assets.

Many insurance underwriters lament that insurance industry is suffering abuses from government. NAICOM should through its advisory role to government address this problem.

The Chartered Insurance Institute of Nigeria (CIIN): This as the educational arm of the industry has no doubt in the past few years made good its promise to deliver mass education on insurance to Nigerians. The institute has in the past few years intensified efforts in this regard, using the youths in secondary schools in Nigeria as point of contact. NAICOM should contribute to the educational programmes of the institute.

The commission should in collaboration with the institute increase effort in its image laundry exercise for the industry by ensuring more effective use of its bureau of public complaints, against any insurer, reinsurer, insurance broker or loss adjuster whose name may be submitted by members of the public.

Nigeria Insurers Association

The Nigeria Insurance Association (NIA), which is the umbrella body of insurance underwriters in the country was established in 1971 to promote and uphold the universally accepted standards of business ethics and professional integrity among its members, using modern technology in maintaining and disseminating information globally. There has been crusade over the years by public speakers against unethical practices among insurance underwriters, the NIA as the umbrella body should tighten its belt in disowning or delisting operators who indulge in any form of unethical practices during the year. It should also caution its members who still drag the image of the industry through the mud through repudiation of genuine claims. NIA last year lived up to its expectation by withdrawing the operating licenses of two insurance firms-Niger Insurance Plc and Standard Alliance Insurance.

It promised that come this year, it would take similar actions on more insurance firms whose activities constitute dent to the image of the industry.

It should through its market conduct reforms and agreement ensure that operators adhere with official premium rate spelt out by the regulator on any policy without rate cutting especially the new Motor Insurance rate. There are feelers that some underwriters are selling the Motor Third Party Insurance at N8000 instead of N15000 stipulated by NAICOM. NIA should support NAICOM in its efforts to ensure that all operators sell at official rate.

Similarly, one big task waiting for both NAICOM and NIA is ensuring that No premium no cover implemented by the regulator ten years ago works among insurance brokers. For now, the policy is effective in direct businesses but not in businesses placed by brokers.

For businesses placed by brokers, insurers are lamenting that they still carry about huge unpaid premium over and over in their annual reports whereas brokers collected the premiums and pocketed them waiting and praying that no risk occurs and once the year ends with out any claim emanating from the policy, the broker will pocket the money and refuse to pay while the under writer writes it off the company's books. The association this year has the duty to enforce market agreement and make sure that no underwriter accepts business from any broker who has past record of unpaid premium. By so doing, the no premium no cover policy of NAICOM will work perfectly both in direct business and in business placed by brokers.

The association this year has the duty to protect and advance the common interests of insurers in Nigeria by creating and sustaining a positive image for the insurance industry and contributing to legislation and decisions made by the government and other public authorities in the best interest of the industry in particular and the national economy in general. NIA whose members constitute core industry operators should contribute its quota towards education of Nigerians on claims filing, claims settlements and policy interpretations and understanding to avoid unnecessary allegations on claims and fraudulent claims which has been presenting the industry on bad light.

Role of NCRIB

The council is the umbrella association of all registered insurance brokers in Nigeria. They are by law expected to be registered by NCRIB before they can be licensed to operate in the Nigerian Insurance market by the National Insurance Commission.

The council has as its objectives the duty to establish and maintain a central organisation for insurance brokers and generally do all such things as may, from time to time, elevate their status and safeguard and advance their interest and procure their general efficiency and proper professional conduct, with a view to ensuring for the community, the existence of a class of insurance brokers who can be relied upon as being trustworthy and duly qualified to perform their responsible duties.

It is to watch over legislation affecting insurance brokers and to promote or support and assist in any legitimate manner, the carrying into effect of any legislation having for its objective the common interest of members, of the council and the general public.

It also has the duty to collaborate as appropriate with government and with various institutions and professional bodies in achieving the objectives of the council.

The council as professional arm of the industry has the duty of marketing insurance to the public through its members interpreting insurance policy documents to the public and ensuring that the client gets his or her claims on time.

The council through its president, Mr Rotimi Edu, should contribute towards the distribution and extension of insurance services to the remotest part of the country. They should champion the course of discarding the old model of marketing to rusher in the regime of modern digital marketing.

The council is expected to champion the cause of retail and grassroots insurance through mass education and awareness creation.

Most importantly, the NCRIB should name and shame any insurance broker who indulge in premium seizure and ensure that its members promote the current regime of no premium no cover in the industry by remitting every premium collected from client within 30 days as stipulated by the law.

Loss Adjusters Institute

The objectives of establishing the institute are t o establish and sustain a professional body of practising loss adjusters of Nigeria. It has the responsibility of engaging in activities that will ensure the general welfare and public well being of insurance loss adjusters and to take necessary actions for the advancement of education in the field of loss adjusting in Nigeria. The objectives should be pursued by the

institute by establishing and maintaining institutions, libraries, schools, and recreation centres for the succor, assistance or education of its members, and the public in Nigeria in loss adjusting.

By applying the funds of the institute in the purchase of proprietary or other interests and the establishment of projects, the proceeds of which shall be appropriated wholly and entirely for charitable purposes and public well being of loss adjusters in Nigeria.

The institute should this year establish a more cordial relationship with the insurers and the regulator especially in respect of the controversy in their commissions and scale.

What CIIN Can Do

The Chartered Insurance Institute of Nigeria as the educational arm of the industry should play key role in insurance education of Nigerian masses. It should realise the fact that part of the problem of the industry is ignorance of what insurance is and what it can do. It should therefore spend quality time in educating the masses in addition to what it is already doing. It should extend this to both public and private schools in the country and encourage insurance departments of various institutions of higher learning.

ARIEN and Grassroots Insurance

The members have the responsibility of promoting and selling grassroots insurance resting on their shoulders. They have numerous members scattered all over the country and are closer to the masses more than the brokers and the underwriters, they should therefore use this opportunity to market insurance to Nigerian masses and in doing that protect the image of the industry by not presenting themselves in bad light. They should key into the digital marketing model embarked upon by insurance firms and spread insurance to all Nigerians. They should establish branches in rural areas to market micro insurance scheme to farmers in rural areas.

RISAN as Risk Takers

Risk Surveyors Association of Nigerian (RISAN) is an association of corporate bodies and individuals performing the duties of risk surveyors in the fields of risk management, risk surveying, loss prevention, risk controls, etc in relation to fire technology, safety devices, engineering, business information and other risk of both industrial, commercial and personal lines.

RISAN provides continuous education for its members and inculcate in them the virtues of maintaining good business relationship with clients when giving professional advice on risks.

One of the areas insurers are not getting things right in Nigeria is in the area of educating Nigerians on how to stay safe and avoid risks. The result of this is that insurance industry is prone to claims emanating from avoidable risks.

The risk surveyors should during the year make their position and services more prominent and accessible than the previous years. Many don't understand their position and place in the insurance industry they should therefore tell people where they are and what they can do to help in reducing the burden of claims from avoidable risks coming the way of insurers.

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